Stocks are down, but pay is up at Vornado Realty Trust. CEO Steve Roth is set to receive $10.85 million in compensation for the year 2015, according to a filing with the Securities Exchange Commission – his largest pay package ever. The raise comes amid weak stock performance at the real estate investment trust.
Vornado’s share price has fallen 19.4 percent since a January 2015 peak, closing at $92.43 Tuesday. Other leading REITs such as SL Green Realty and Boston Properties also saw their stocks fall in recent months amid worries over the global economy and the health of the U.S. real estate market.
The pay package — which includes $261,724 for a car and driver — still has to be approved at a May 19 shareholder meeting.
Roth’s compensation is mostly performance-based, and in the filing Vornado justifies the pay hike by pointing to increases in both EBITDA (earnings before interest, taxes, depreciation and amortization) and funds from operations (a common performance metric for REITs).
David Greenbaum, the president of Vornado’s New York operations, made $5.7 million in 2015 and chief investment officer Michael Franco raked in $5.4 million.
Roth made $9.8 million in 2014 and $7.3 million in 2013 – figures that pale in comparison to executive pay at rival REIT SL Green. That firm’s CEO Marc Holliday made $16.4 million in 2014, prompting criticism from some observers.
According to the filing, the increase in Roth’s pay is entirely due to an increase in the accounting value of his so-called OPP awards – stock options tied to performance over a five-year spell. His $1 million cash pay and additional $1 million in cash incentives remained unchanged from 2014.
Bizarrely Roth, a millionaire many times over, also received a $18,000 matching 401k contribution from Vornado in 2015.
In September of last year, Roth summed up his investment philosophy with Crain’s. “Buy in the right places, buy the highest quality that you possibly can, because the highest quality performs the best in up times and in down times,” he said. “And believe in America. just keep buying. Peace.”